Semotus Reports Second Quarter Financial Results; Company Increases Revenues by 23%


LOS GATOS, Calif. , Nov. 10, 2004 (PRIMEZONE) -- Semotus Solutions (AMEX:DLK), an innovative provider of real-time professional market data and intelligent wireless communications software, reported its financial results for the three and six months ended September 30, 2004. The Company's focus on marketing and sales was reflected in a 23% increase in revenues in both periods to $457,562 and $898,137 in the three and six months ended September 30, 2004 versus $373,172 and $726,834 in the three and six months ended September 30, 2003. The revenue increase is the result of a recovering technology economy with increased IT purchases and the result of the Company having increased its sales force. Semotus also reduced its cash burn from operations by 53%. Gross profit margin increased to 84% for the three and six months ended September 30, 2004 versus 83% in the three months and 80% for the six months ended September 30, 2003.

Semotus reported a net loss of $(155,909) or $(0.01) per share for the three months and net income of $159,050 or $0.01 per share for the six months ended September 30, 2004 versus a net loss of $((1,156,077) or $(0.06) per share and $(1,828,785) or $(0.09) per share for the three and six months ended September 30, 2003. This operating improvement was accomplished through increased revenues and a continuing reduction in operating costs. The net loss and net income numbers were also affected by a non-cash stock compensation expense in the periods ended September 30, 2003 and a reversal of that stock compensation expense in the periods ended September 30, 2004 as explained in the following paragraph.

The net loss in the three and six months ended September 30, 2003 was negatively affected and the net loss and net income in the three and six months ended September 30, 2004, respectively, were positively affected by the application of the variable method of accounting for certain stock options that were re-priced. This is further discussed in the Company's 10-QSB, in Note 4 to the Consolidated Financial Statements, "Stock Based Compensation," in accordance with generally accepted accounting principles. Eliminating the stock compensation expense for the three and six months ended September 30, 2003 Semotus had a net loss of $(241,350) and $(535,408) respectively. Eliminating the non-cash reversal in the three and six months ended September 30, 2004, Semotus had a net loss of $(217,099) and $(434,071), respectively.

Semotus' operating performance continued to improve, as evidenced by a continued increase in its gross profit margin to 84% for the three and six months ended September 30, 2004 versus 83% and 80% for the three and six months ended September 30, 2003, respectively. Also furthering the Company's goal of cash breakeven, Semotus reduced its overall use of cash by 53% to $197,530 from $424,272 in the periods ended September 30, 2004 versus 2003. The reduction is the result of the improvement in cash from operations as the Company has continued to grow its revenues while at the same time reducing its operating expenses. The Company believes its cash position of $1,519,522 at September 30, 2004 provides sufficient reserves to execute its current business plan.

"We signed over twenty four new accounts in the quarter in the HipLinkXS and Financial product divisions. These include new international financial firms like Rubicon in the UK and HipLink customers like Clay County Sheriff, Boston Medical Center, CGI Information Technology Services, Sterling Jewelers, and the Montgomery County E-911 Center to name a few," stated Pamela LaPine, Semotus Solutions executive vice president. "In addition, we upgraded existing systems and support for over 32 existing HipLinkXS customers. Some of the upgrades included: additional integrations to network monitoring and data systems, voice messaging and Interactive Voice Response, Two-way functionality, and fail-over capabilities."

"In the second quarter Semotus hired additional Sales personnel and is aggressively investing in Marketing and Sales. The company is confident that the short term expense of additional sales personnel will produce meaningful increases in revenue in future reporting periods. An increase in revenue will provide Semotus with the additional income needed to achieve sustained profitability," stated Anthony LaPine, Semotus CEO.

"The improved financial results for the Company's second quarter reinforce my conviction that the market has undervalued the Company," stated Anthony LaPine. "Semotus has achieved its first profitable quarter and is growing its revenues. The company has excellent gross profit margins (84%), a Fortune 1000 customer base, leading edge products, cash reserves, a low burn rate, a clean equity structure (common stock with no preferred shares or toxic convertibles), no litigation, no debt, and an experienced and talented management team."

About Semotus Solutions

Founded in 1993, Semotus Solutions (AMEX:DLK) is the premier provider of software for the mobile enterprise, connecting employees to critical business systems, information and processes. Semotus has a Fortune 1000 installed customer base and more than 600 corporate clients including Lockheed Martin, Blue Cross Blue Shield, Coca-Cola, Hewlett Packard, Nextel Communications, JP Morgan-Chase, and The United Nations. Semotus Solutions' software provides mobility, convenience, efficiency and profitability in the areas of workforce automation, finance, healthcare, and m-commerce. www.semotus.com; www.hiplinkwireless.com

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "intends," "believes" and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.



            

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